#China

Amsterdam’s port facility is more crowded than a Walmart on Black Friday and it’s all China’s fault.

That, BMW wonders how it all went wrong, Millennials bare their souls to a salesman, Toyota walks down memory lane, and a safety regulator has some explaining to do … after the break!

There’s not a more uncomfortable phone call for a car dealership’s finance manager to make then asking a customer to come back to have their finance or lease contract rewritten. This is typically caused by sales managers — the people most despised by finance departments — who spot deliver a vehicle based on their wrong guess about the rate or term a lender would approve the deal. Needless to say, the vast majority of these rewrites result in a higher monthly payment for the customer.

A couple of years ago, a finance manager at a Los Angeles Mercedes-Benz dealer told me and a Mercedes-Benz Financial colleague of mine about the day he picked up the phone to fix the opposite situation: the dealership had miscalculated the taxes on a client’s lease on a black ML350 Bluetec SUV and they needed the client to return and sign a new lease agreement reflecting payments of $14 per month lower than the original contract.

He called the customer with the good news only to hear, “No no no! Payment good. Payment good. We OK!”

After he hung up, he thought, “We just got snookered. That ML is probably on a slow boat to China and the factory is going to kill us.”

FCA’s sweater-in-chief Sergio Marchionne has a plan to turn around the debt-laden and ailing automaker: stop building cars that lose money. That sounds like common sense, so long as oil prices stay low and the demand for trucks, SUVs and crossovers remains high.

But that plan introduces a new set of problems, chief among them the fact that ditching the car market leaves FCA exceptionally exposed to future volatility in oil prices. Crude prices affect prices at the pump, which affects the demand for certain types of vehicles. Sergio is betting oil prices will stay low by focusing on vehicles with ever-increasing price tags and ever-growing gas tanks.

Still, there will always be some demand for small cars. It was true in 1950 and it is true today. So what will Mr. Sweater do to meet that demand? Simple: he’ll buy those vehicles from another automaker and badge engineer them the old-fashioned way.

Ford announced Thursday that it had earned a record pre-tax profit of $10.8 billion for 2015 — including $2 billion in the fourth quarter — bolstered by pickup sales in the U.S. and strong growth in China.

The record-setting year for the automaker wasn’t much of a surprise — second- and third-quarter results set records along the way — but Ford’s ability to finally turn a profit in Europe may be the most unexpected news. The automaker had lost money in Europe since 2011.

Latin America, notably Brazil, will continue to be a sore spot for Ford and other automakers. Ford said Thursday it expects to lose more money there in 2016 than the $832 million it lost there in 2015.

China’s finance minister said Saturday that the government will end green car subsidies by 2021 and let its market dictate whether EVs or plug-in hybrid can sell on their own in the country, Reuters reported.

Lou Jiwei told reporters that the government would cut subsidies by 20 percent over the next two years, by 40 percent before 2020 and eventually end subsidies altogether by 2021, according to the report.

China surpassed the U.S. last year in electric car sales, in part because of the government’s aggressive support. Few electric cars made in China are available outside the country, however its expected that Cadillac will build in China and sell in the U.S. a plug-in version of its CT6 sedan.

Volkswagen’s chief in China says they’re probably not retaking the crown from General Motors there anytime soon.

That, Apple’s lead car guy is gone, Takata’s in trouble and more … after the break!

Volkswagen to European diesel owners: “Why you mad?”

That, the mailman can’t deliver on the first lawsuit against GM, Caddies built in China and 51.3 million cars were recalled in 2015 … after the break!

Investors aren’t necessarily drinking automakers’ Kool-Aid that 2016 will be full of beer and Skittles.

That, the China-made Cadillac CT6 that’ll eventually get here, El Chapo’s cheapo getaway car and General Motors’ questions get down and dirty … after the break!

“What do I gotta do to get you to drive out of here in a brand-new 2016 Chevrolet Malibu today?”

That, Ford and Google are moving to the country, Hyundai halts in China and Volvo’s wagon spied in some guy’s garage … after the break!

Long-time TTAC readers may be familiar with my old friend Rodney, the Billy Dee Williams lookalike with whom I sold cars, raced bicycles, rode motorcycles, and generally raised some sort of mild hell from 1995 until the present day. (If you’re not, here’s a field guide to his eccentric accomplishments.)

Over the course of the past week, Rodney’s had two life-changing things happen. The first was that he got his driver’s license back from the rural Ohio court which has held it hostage against a fairly large sum of fines and penalties since 2010. The story of how he lost his license involves everything from a Nissan Stanza jumping train tracks at 60 mph to the “black bull and white cuck” scene, and it’s a story I’ll tell once all the statutes of limitations expire.

The second is that Rodney’s mother, who is in her late sixties, was just conned into leasing a Buick Encore.

The nice people at Marketplace, who provided the above photo, have a fun website where you can put Chinese smog on your favorite city. Thankfully, most American cities haven’t had a smog problem in the 21st century. Beijing, on the other hand, is experiencing the proverbial terrible, horrible, no good, very bad day.

General Motors announced Thursday it will import a Buick crossover from China to the United States by the end of 2016, much to the UAW’s disappointment.

According to the Detroit Free Press, the crossover in question, the Envision, is currently produced at a facility in the Shandong province. The Buick brand itself is doing well for itself in China, where it’s GM’s best-known brand, and in the U.S., where the brand is experiencing rapid growth as of late. In both instances, the main draw for Buick is its small and medium crossovers and SUVs.

Jaguar Land Rover will trim $6.8 billion from its expenses by 2020, in part, because of slowing auto sales in China, Reuters reported.

The automaker will consolidate models to common lines, overhaul its supply chain and build 1 million cars by 2020, according to sources familiar with the plan.

The plan, which is called Leap 4.5 (presumably because the plan cuts £4.5 billion), will also help the automaker afford increasingly difficult emissions standards.

Lexus won’t be building cars in China anytime soon due the automaker’s concerns regarding production quality, Bloomberg reported Thursday.

“There’s too much quality risk in China to produce there,” said Takashi Yamamoto, executive vice president of Lexus International.

Did you hear that mic drop? Hello? Anyone there?